The Bribery Act 2010: Employment Implications

The Bribery Act 2010 received Royal Assent in April 2010. On 20 July 2010 the Ministry of Justice confirmed the Act is due to come into force in April 2011.

The new Act will prohibit bribery and introduces four offences – paying a bribe, receiving a bribe, paying a bribe to a public official and the corporate offence where an organisation fails to prevent bribery.

Bribery is defined within the new Act as the making of a promise of financial or other advantage with the associated intention of influencing a person, or the actual influence of a person, to perform improperly.

The offence that will be of most interest to employers is the corporate offence of failing to prevent bribery. This places criminal liability on an organisation where an act of bribery is committed  “in connection with an organisation’s business by any person associated with the organisation”.

A person "associated" to the organisation is defined as being anyone who performs services for the principal. An organisation could therefore be found guilty of failing to prevent bribery not only in relation to the acts of its employees, but also its consultants, sub-contractors and any other person that performs services for the company.

The corporate offence applies to all organisations and partnerships, and is a strict liability offence. An organisation may, therefore, be found guilty of the offence of failing to prevent bribery without the need to show intention or negligence on the organisation’s behalf.

Further, the offence will apply not only to companies incorporated in the United Kingdom, but also to any other body corporate or partnership incorporated outside the United Kingdom if it carries on business within the UK.

The penalty for an organisation failing to prevent bribery is an unlimited fine. Senior officers of an organisation may also be personally liable for either a fine or up to ten years imprisonment if they consent or connive to commit a bribery offence.

The new Act will, however, provide a defence for organisations in relation to the corporate offence. Employers will be able to avoid liability for failing to prevent bribery if it can be shown that adequate procedures were in place in order to prevent people associated with them from committing bribery.

At present, the guidance relating to "adequate procedures" has not been published. However, in the Ministry of Justice’s press release on 20 July 2010, it was announced that a consultation on the proposed guidance on adequate procedures will be launched in September 2010.

The Bribery Act will therefore have a great affect on employers. If a member of staff, or indeed any person associated with the company, commits an act of bribery, that company could be found liable for failing to prevent such bribery from taking place, unless it can be shown the employer had adequate procedures to prevent such bribery taking place.

Employers will therefore need to consider the procedures they have in place to deal with issues involving bribery to ensure that, if necessary, they will be able to rely on the defence under the new Act.

Employers should review their policies and procedures to ensure that such procedures make it clear that bribery and corruption is not acceptable. For example, it may be useful for employers to put policies in place regarding the giving and receiving of gifts in relation to its customers so that all gifts are declared and to make it clear to those individuals associated with the company what is and is not acceptable. Further, disciplinary policies should also need to be amended so that bribery and corruption are specifically stated to be acts of gross misconduct.

It may also be appropriate to consider training for staff and even perhaps in some cases to consider amending standard terms and conditions of employment to include a warranty from employees that they will not engage of acts of bribery or corruption.

For more information on this or any other employment issue contact Nick Hall on 01604 233233 or click here to email him.